Digital Disruption: Banks & Financial Institutions Cut Workforce
Our preliminary research pointed to significant decline of workforce in Indonesian banks and financial institutions last year. Bank Danamon (BDMN), for example, cut its permanent employees by 2,322 or 7.26% to 29,628 people last year. Number of non-permanent employees also fell sharply by 5,287 or 43.8% to 6,782. So, Danamon, which is also parent of Adira Multifinance (ADMF), let go 7,609 workers last year alone.
Jokowi’s Go East: Maluku Investments (2)
Maluku is a small province by population. It is a home to 1.7 million people only. The province, however, is set to become the richest because of its potentials in agriculture, fisheries, oil & gas, and metals. ASX-listed Finders Resources Ltd, by far, is the largest investment realized there. It operates copper cathode facility with combined capacity of 28,000 tons per annum in Wetar Island, souther part of the province, which is closer to East Nusa Tenggara province.
Jokowi’s Go East: Maluku Investments
President Joko ‘Jokowi’ Widodo is currently in Ambon, the capital city of Maluku province. Other than attending the meeting of Islamic Students Association (HMI), the President is expected to address more about investment opportunities and challenges in the province, known for its natural resources, including fisheries and natural gas.
Robust Investment Outlook (13)
Significant progress in public infrastructure will likely boost investments in manufacturing, property, and hospitality sectors going forward. State-owned companies and domestic property players might still be the main driving forces in the short-medium term, but foreign direct investments (FDIs) are also predicted to follow.
Trans-Sumatra Toll So Far
As physical construction of toll roads in Sumatra Island advanced further, the government is now required to spend more resources in attracting investors, especially in the natural resources processing industries and consumer products to support the island with closer to 60 million population.
Update on Freeport’s Smelter Project: Who Gets What
The multi billion dollar project has been delayed for many years now. In fact, we’ve been talking about this for a decade now. Rather than busy attracting new investors, the government should focus on ensuring realization of pending investments like this one. Where are we now on this project?
Ending Disruptive Policies
In order to achieve higher economic growth, Indonesia needs to boost investments and export. Unfortunately, government agencies yet to stop controversial and disruptive policies. Entering political years of 2018 and 2019, we see more of such policies, including implementation of sugar auction, import duty for tobacco, and mandatory use of Indonesian flag vessels for export of commodities, including thermal coal and palm oil.
Tourism Industry 2018 Outlook
Indonesia missed its target of foreign tourist visits last year due to Mt Agung eruption in Bali Island, which affecting visits to the resort island and West Nusa Tenggara. Foreign visitors entering Ngurah Rai airport in Bali and Lombok airport in West Nusa Tenggara fell 29.8% and 26.7% year-on-year respectively in December. Still, 21.9% growth to 14.04 million visits for full year 2017 was a great achievement.
Robust Investment Outlook (11)
Indonesia will likely see more investments in the processing of natural resources, including minerals. MCC22 Group, member of Metallurgical Corporation of China Ltd (MCC), has on January 27th, 2018 signed a contract with Indonesia Dexin Steel & Iron Co Ltd for the construction of 3.5 million tons per annum steel and iron plant in Sulawesi Island.
Walk The Talk: Chemical Projects
The biggest irony is that Indonesia, which has everything from coal to gas, has naphtha cracker with design capacity of 900,000 tons per annum only. Singapore, on the other hand, has capacity to produce 3.8 million tons, while Thailand reached 5 million tons per annum.